Financial Planning

Don’t Leave Your Survivors In The Dark

If war and the ongoing threat of terrorism have left you feeling terribly mortal, ask yourself this: If you died tomorrow, would your family know everything it should about your financial situation? And even if your spouse is up to speed, what would happen if you both came to an untimely end? Would anyone know exactly what you have and where to find it?

If your affairs are already in order—will or living trust filed, guardians for your children named, estate plan up to date—good for you. But each year, the government takes over billions of dollars in unclaimed assets, and by one estimate, more than $1 in $4 of life insurance benefits goes unpaid at the death of policyholders. Often, survivors are simply left in the dark. To protect your family, make a master list of essential facts and get copies to several friends, relatives, or advisors. Here are a few things to be sure to include.

Where’s the money? You probably have financial assets tucked away in multiple accounts at several different institutions—an account or two at local banks; one 401(k) at your current job and another at the company you left 10 years ago; three IRAs, each of them with a different custodian; a college savings account or two for each of your children—you get the idea. Sure, you ought to consolidate some of that money and check all of the beneficiary designations. But in the meantime, take care that nothing gets lost in the shuffle. On your list, including account numbers and contact information.

Policy issues. Even if your insurance situation is cut and dried—for example, you and your spouse each have a term policy on your own lives—your family won’t benefit if nobody knows the coverage exists. And your situation may well be more complicated, with additional insurance at work, annuities, paid-up cash value policies. If it pays a death benefit, adds it to your list.

Mortgage Matters. Letting survivors know whom you owe and how much—on your house, cars, margin loans, and so on—may not be as vital as getting the information about your assets. After all, your creditors will no doubt keep in touch. Still, having these names and numbers on your list will save time and trouble after you’re gone.